As smokers quit the habit, British tobacco giant Imperial Brands is seemingly looking towards another plant to bring in the billions: cannabis.
Imperial, which dropped the word tobacco from its name eighteen months ago, has hired medicinal cannabis expert Simon Langelier to join its board as a non-executive director.
Mr Langelier, who spent thirty years at rival tobacco firm Philip Morris, is also chairman of Canadian firm PharmaCielo which supplies medicinal cannabis oil extracts. That experience could be valuable in helping Imperial maximise opportunities from a wave of marijuana legislation spreading across the US.
Dozens of states have legalised the drug for medical applications, and several have now allowed recreational use. The chance that cannabis could be legalised at a federal level in the US has become a realistic possibility.
In a statement, Imperial chairman Mark Williamson said Imperial stands to benefit from Mr Langelier’s experience in tobacco and “wider consumer adjacencies” – though he stopped short of confirming a move into commercial cannabis sales.
Speculation has mounted that tobacco firms could apply the experience they have in crop farming and distribution to the nascent, but potentially massive, cannabis business.
One estimate by Cowen & Co. predicts consumers will buy $50bn (£39bn) of legal cannabis this decade. Legal weed could boost the economy of California by as much as $5bn, according to a new study by the University of California Agricultural Issues Centre.
Besides cannabis, Mr Langelier could also help to spearhead Imperial’s move into vaping and other smoke-free nicotine products.
At Philip Morris, he headed up the next-generation products unit from 2007 to 2010.
Imperial has invested in e-cigarettes but has not looked to capitalise on another smoking alternative – heated tobacco devices.
Philip Morris has put its weight behind heated tobacco as its primary next-generation product. Its biggest seller in the reduced-risk market is a heated tobacco device called iQOS.
In May, Imperial’s chief development officer Matthew Phillips said the company was waiting to see if the technology would catch on outside of Japan, which is currently the biggest market.
There, the iQOS has captured 9.6 per cent of the cigarette market since launching two years ago. Mr Phillips claimed Imperial could have a competing product on the market within months, if it thought the market was big enough.
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